NOTE 10 – RESTATEMENT

The Company’s consolidated financial statements have been restated as of September 30, 2013, for the three and six months ended September 30, 2013 and for the period from October 19, 2011 (date of inception) to September 30, 2013. On September 10, 2013, the Company issued $501,337 of the Company’s 12% Senior Convertible Debentures (“12% Debentures”). In connection with the transaction, the Company made certain statements or omissions, in the transaction documents that were incorrect as of the date made. Such statements or omissions resulted in an event of default under the terms of the transaction documents and 12% Debentures. Upon such event of default: (i) the principal and accrued interest balance on the 12% Debentures increased to 150%, (ii) the interest rate increased to 18% (commencing 5 days after the event of default), and (iii) the amounts due under the 12% Debentures were accelerated and became immediately due and payable. On December 5, 2013, management concluded that, because of the above error identified in the Company's previously issued financial statements for the quarter ended September 30, 2013, the Company should restate its previously issued financial statements for the relevant periods.

Further, on June 16, 2014, the Company determined that, because of a misapplication of the accounting guidance related to convertible debt and warrants issued in September 2013, and a full-ratchet anti-dilution feature that was included in these instruments , the Company’s previously restated issued unaudited financial statements for the three and six months ended September 30, 2013 included in the Company’s Quarterly Report on Form 10-Q/A for the six months ended September 30, 2013 (the “Previously Restated Financial Statements”) filed with the United States Securities and Exchange Commission (the “SEC”) contain certain errors that materially impact the previously issued financial statements.

On September 10, 2013, the Company issued $501,337 of the Company’s 12% Senior Convertible Debentures (“12% Debentures”). In connection with the transaction, the Company also issued common stock purchase warrants to acquire 25,066,850 shares. The warrants had an exercise price of $0.05 per share. The Company also issued common stock purchase warrants to acquire 2,506,685 shares as payment for services. Both the 12% Debentures and the warrants contain full-ratchet anti-dilution features. At the time of filing the Previously Restated Financial Statements, the Company did not account for the reset provisions as a derivative in accordance with Accounting Standards Codification (ASC) 815, Derivatives and Hedging. As a result, the Company will recognize additional expense of approximately $1,159,000 for the three and six month periods ended September 30, 2013. The derivative liabilities will increase by approximately $1,752,000 at September 30, 2013.

The following tables summarize the effects of the adjustments on the consolidated balance sheet items, statements of operations and statements of cash flows for the period ended September 30, 2013.

Accordingly, the Company’s balance sheet at September 30, 2013 and for the three and six months ended September 30, 2013, the statement of operation has been restated herein. There was no effect on cash flow on net cash used in operating activities, investing activities and financing activities. The effect of correcting this error in the Company’s financial statements at September 30, 2013 and for the three and six months ended September 30, 2013 are shown in the table as follows:

Balance Sheet data	September 30, 2013 (unaudited)
	As previously restated			Adjustments to Restate				Restated
Total Assets	$	331,432		$	-			$	331,432

Derivative liability		49,995			1,752,664		(a)		1,802,659

Total Current Liabilities		1,668,447			1,752,664				3,421,111
Total Liabilities		1,711,422			1,752,664				3,464,086

Stockholders’ Equity:
Common stock, $.001 par value; 495,000,000 shares authorized; 87,551,493 and 83,651,493 shares issued and outstanding as of September 30, 2013 and March 31, 2013, respectively		87,552			-				87,552
Additional paid-in capital		2,349,021			(593,228	)	(b)		1,755,793
Common stock to be issued		51,125			-		-		51,125
Deficit accumulated during development stage		(3,867,688	)		(1,159,436	)	(a)(b)		(5,027,124	)
Total Stockholders’ deficit		(1,379,990	)		(1,752,664	)			(3,132,654	)
Total Liabilities and Stockholders’ deficit	$	331,432		$	-			$	331,432

(a)

To increase the derivative liability.

(b)

To adjust for incorrect accounting for beneficial conversion feature and derivative instruments.

Statement of operations	For the Three Months Ended September 30, 2013 (Unaudited)								For the Six Months Ended September 30, 2013 (Unaudited)
	As previously restated		Adjustments to Restate				Restated		As previously restated		Adjustments to Restate				Restated

Loss from operation	$	630,441	$	(12,244	)	(a)	$	618,197	$	744,795	$	(12,244	)	(a)	$	732,551
Other expenses		946,022		1,171,680		(b)		2,117,702		952,183		1,171,680		(b)		2,123,863
Net loss	$	1,576,463	$	1,159,436		(a)(b)	$	2,735,899	$	1,696,978	$	1,159,436		(a)(b)	$	2,856,414

(a)

To correct value of compensation warrants.

(b)

To record $1,381,781 of expense related to the issuance of derivative instruments and $210,101 of income related to the change in fair value.